Robotaxi Firm Says It Is Closer to Profit --- Pony AI says it has cut cost of building its most-advanced system by 70%

"Chinese robotaxi company Pony AI says it is getting closer to profitability after clearing a cost hurdle its chief technology officer believes can help unlock the commercialization of driverless vehicles.

Pony AI rolled out three new robotaxis co-developed with Toyota and Chinese automakers BAIC Motor and Guangzhou Automobile Group at the Shanghai Auto Show last week, and said it could now build its most advanced autonomous driving system for 70% less than before.

Pony AI's cost cuts bring it closer to single-unit break-even, meaning it books profit every time a new robotaxi joins its fleet, Chief Technology Officer Lou Tiancheng said.

Analysts at Nomura estimate the Guangzhou, China-based company has cut bill-of-materials costs for its robotaxis to about $41,165 from $137,217.

"The key is software optimization," Lou said. "For example, our software performance has tripled under the same computing power."

Cheaper production is a crucial step toward the single-unit break-even goal that Chinese autonomous-driving companies have been racing toward.

Bernstein analysts think that the latest generation of robotaxis puts the break-even goal within reach for Pony AI by the end of this year, but that it is unlikely to post a profit for at least five more years until its fleet size reaches about 50,000 vehicles.

Pony AI is planning to start mass production of robotaxis in mid-2025, aiming to expand its fleet size to more than 1,000 from about 300 by the end of this year.

Lou said Pony AI's team was zeroed in on cutting down costs and scaling to reach commercialization.

Pony AI has yet to turn a profit, reporting a sharply wider quarterly loss in its first results since going public late last year.

Chinese companies are taking different routes to commercializing their autonomous driving offerings. Baidu's Apollo Go is banking on fleet size to boost profit, U.S.-listed WeRide's strategy is to diversify into various types of vehicles, and Pony AI's aim is to press its technological advantage and grow its presence in China.

Pony AI's technology continues to lead other players such as Baidu and ride-hailing firm Didi in ride performance, Bernstein analysts said in a recent note, especially in areas like U-turns, lane switching on highways, and controlling speed in a straight line.

"The key of our self-driving technology is to let the computer think about what to do instead of just trying to mimic human behavior," said Lou. "We are trying to use less computing power to deliver stronger network capabilities."

Though there are more driverless vehicles circulating in China than ever before, concerns about safety persist that could challenge companies' ambitions to get more riders into robotaxis.

While acknowledging those worries, Lou said there were lessons to be learned from incidents like the recent fatal crash involving a vehicle with assisted-driving features. Accidents can raise safety awareness and push the industry in the right direction on more rigorous testing, he said.

Tensions around tariffs and U.S.-China relations have also raised concern that tech companies could struggle to source the chips they need.

Lou said restricted access to chips won't hurt Pony AI much, since the company has prepared system alternatives using domestic chips.

Whether the Silicon Valley-founded company will manage to outpace larger robotaxi contenders remains to be seen. For now, the focus is on getting costs down and profitability up.

"The most critical goal is to break even," said Lou." [1]

1.  Robotaxi Firm Says It Is Closer to Profit --- Pony AI says it has cut cost of building its most-advanced system by 70%. Huang, Jiahui.  Wall Street Journal, Eastern edition; New York, N.Y.. 29 Apr 2025: B4.